Following on from our previous post re Colin Keane’s land report, we will now explore what is happening across Perth’s corridors.
At present there are 165 active estates in Perth achieving an average of 3 sales per month. At our peak in the mining boom this rate was 8 sales per estate. We are currently selling at 17% capacity and again at our peak we performed at 60% capacity. And we will need to see 1300 sales/month before we will see prices improve (which is double the 700 that Colin Keane is suggesting we should be aiming for).
The North East corridor is the best performing sub market with 25% of all activity across Perth. There is currently 129 lots sold per month but it ideally should be selling 175 lots and as such is 26% below capacity. At present, capacity is in line with target and hence when the market returns to normal, this will be the first sub market to perform well.
North West Perth represents 20% of the market share and this is linked to its proximity to the coast. Its monthly target is 140 sales and this corridor is currently achieving 89 sales pcm. On this basis this corridor is performing 36% below target. However unlike the North East, this market is 159% oversupplied.
South West (Baldivis) also represents 25% of the market share. With 120 sales pcm and a target of 175 sales/month this corridor is performing 31% below target. This area however is the worst oversupplied with 302% excess capacity (currently 1257 lots on the market).
The South East sector also represents 25% of the market share and 102 sales pcm and a target of 175 sales per month. Performing 42% below capacity, this market is also reflecting 242% excess capacity with 625 lots on the market. This area is also overvalued by $7000 on land prices.
And finally Peel represents 5% of the market share with 21 sales pcm and a target of 35 sales per month. Performing 40% below capacity, this area has 324 lots on the market and hence representing 463% excess capacity. Land in this corridor is also $20,000 overpriced.
It is quite evident that if we can attract the 1000 people per month than this will have a significant influence on the health of our land sales and this is now our crucial focus.
While Colin stated we didn’t have to worry about overseas net migration, what we do need to do is cut our interstate migration by 50% (from 3000 people moving to the East to 1500) and this would have the desired effect we need.
But until we reach that target of 1000 people per month, the Perth land market will continue to face challenges and more so in the South West and Peel regions. If you hold land in these areas, then you need to be considering innovative marketing strategies to stand out from the competition. The good news is that PropertyESP is renowned for our marketing prowess, so contact Sam today on 0452 067 117 and we will troubleshoot your sales!